Mergers: Commission consults on proposal for simplifying procedures under the EU Merger Regulation

The European Commission invites the public to comment on a proposal to simplify certain procedures for notifying mergers under the EU Merger Regulation. The proposal aims to make EU merger control even more business-friendly by cutting red tape and streamlining procedures. The proposed changes could allow up to 70% of all notified mergers to qualify for review under the Commission's simplified procedure, i.e. about 10% more than today. This could result in savings for the merging companies concerned, cutting lawyers' fees by up to one half and reducing preparatory in-house work. In addition, the Commission proposes to reduce the net amount of information required to notify all mergers, which will significantly lessen the administrative burden. This initiative is part of the Commission’s overall effort to make administrative procedures less burdensome for business, thereby stimulating growth and making Europe more competitive.

In particular, the Commission proposes to update the Notice on a simplified procedure for treatment of certain mergers. Under this notice, companies can use a shorter notification form for certain categories of mergers that are generally unlikely to raise competition problems. If the combined market shares of the two merging companies are below a certain threshold, the merger is treated under the simplified procedure. The Commission can then clear such cases without an extensive market investigation.

The Commission now proposes to expand the scope of the simplified procedure, in light of experience and the Commission's substantive merger guidelines. Expanding the simplified procedure would reduce the burden for business further. In particular, the market share threshold for treatment under the simplified procedure for mergers between firms competing in the same market should be raised from 15% to 20%. For mergers between firms active in upstream and downstream markets - such as between a producer of car parts and a car manufacturer - the threshold should rise from 25% to 30%. The Commission also wants to make it possible to treat a case as simplified where the combined market share of two firms active in the same market is above the 20% threshold but the increase in market share resulting from the merger is very small.

In addition, the Commission proposes to amend the Regulation implementing the Merger Regulation in order to update and streamline the merger notification forms. In particular, in cases that do not fall under the simplified procedure, merging firms would only have to submit detailed information for those markets where their market share actually exceeds the threshold for applying the simplified procedure.

Background

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

Mergers treated under the simplified procedure are and will remain fully subject to the system of merger control as provided for by the Merger Regulation. They must be notified to the Commission, are reviewed by it and may only be implemented after the Commission has taken a decision authorising the merger. However, for cases dealt with under the simplified procedure, this is done in a way that is far less burdensome for the merging companies.

The proposed initiative is a technical reform within the existing framework of EU merger control as defined by the Merger Regulation. It does not entail an amendment of the Merger Regulation itself.

Replies to the consultation can be submitted until 19 June 2013. The consultation documents are available at: